Ecotourism and Economic Growth in the Galapagos: An Island Economy-wide Analysis

This paper raises questions about the compatibility of "ecotourism and conservation in the unique environment of the Galapagos Islands. It updates a 1999 economy-wide analysis that predicted that increases in tourism would result in rapid economic as well as demographic growth on the islands. The following six years witnessed sharp growth in tourism; a restructuring of tourism around larger cruise ships and new, larger hotels; and rapid population growth. Our findings indicate that total income (that is, the gross domestic product) of the Galapagos increased by an estimated 78% between 1999 and 2005, placing Galapagos among the fastest growing economies in the world. Tourism continues to be far and away the major driver of economic growth; however, new injections of all sorts of spending, including by government, commercial fishing, and conservation agencies, have had a multiplier effect on income in the Galapagos economy, and as a result, on population growth, via uncontrolled immigration that is theoretically prohibited by the Special Law of the Galapagos to prevent ecological harm to the islands. Further, immigration has diminished the effect of economic growth on household income, creating political pressure to find even more economic development options for Galapagos residents, including commercial fishing. The linkage between economic growth, led by tourism or any other sector, and environmental protection of the Galapagos should be taken seriously when designing and implementing economic development and conservation programs.Resource /Energy Economics and Policy,

Impacts of Marine Reserves in the Galápagos Islands: Some Considerations

The recent establishment of the Galápagos Marine Reserve (GMR) presents a unique opportunity to analyze the economic implications of using zonification as a tool to manage conflicting claims to a fragile and limited resource. Recognizing that the long-term success of the GMR depends on the cooperation of all of the stakeholders involved, a remarkable feature of the new legislation is that further policy development depends upon analysis of the socio-economic and environmental impacts that the new management regime has on both the users and the ecosystems of the GMR. We consider some of the economic impacts to the residents of Galápagos, and in particular to the fisheries sector, resulting from the use of “no take” zones as a management tool. We develop a simple two-sector fixed labor model to illustrate how the establishment of “no take” zones, which impact the fishing sector, will also affect the tourism sector through both the labor market and biotic mechanisms. Although we find that the establishment of marine refugia passes a rough cost-benefit analysis, we discuss the importance of considering the intertemporal nature of the impacts resulting from the closure of fishing grounds in the GMR when analyzing the economic impacts to the various sectors.Keywords: Marine Reserves, Fisheries, Ecotouris

A Two-Sector Analysis of the Galápagos Marine Reserve

The recent establishment of the Galápagos Marine Reserve (GMR) presents a unique opportunity to analyze the economic implications of using zonification as a tool to manage conflicting claims to a fragile and limited resource. Recognizing that the long-term success of the GMR depends on the cooperation of all of the stakeholders involved, a remarkable feature of the new legislation is that further policy development depends upon analysis of the socio-economic and environmental impacts that the new management regime has on both the users and the ecosystems of the GMR. We consider some of the economic impacts to the residents of Galápagos, and in particular to the fisheries sector, resulting from the use of “no take” zones as a management tool. We develop a simple two-sector fixed labor model to illustrate how the establishment of “no take” zones, which impact the fishing sector, will also affect the tourism sector through both the labor market and biotic mechanisms. Although we find that the establishment of marine refugia passes a rough cost-benefit analysis, we discuss the importance of considering the intertemporal nature of the impacts resulting from the closure of fishing grounds in the GMR when analyzing the economic impacts to the various sectors

Ecotourism and Economic Growth in the Galapagos: An Island Economy-wide Analysis

This paper raises questions about the compatibility of "ecotourism" and conservation in the unique environment of the Galapagos Islands. It updates a 1999 economy-wide analysis that predicted that increases in tourism would result in rapid economic as well as demographic growth on the islands. The following six years witnessed sharp growth in tourism; a restructuring of tourism around larger cruise ships and new, larger hotels; and rapid population growth. Our findings indicate that total income (that is, the gross domestic product) of the Galapagos increased by an estimated 78% between 1999 and 2005, placing Galapagos among the fastest growing economies in the world. Tourism continues to be far and away the major driver of economic growth; however, new injections of all sorts of spending, including by government, commercial fishing, and conservation agencies, have had a multiplier effect on income in the Galapagos economy, and as a result, on population growth, via uncontrolled immigration that is theoretically prohibited by the Special Law of the Galapagos to prevent ecological harm to the islands. Further, immigration has diminished the effect of eocnomic growth on household income, creating political pressure to find even more economic development options for Galapagos residents, including commercial fishing. The linkage between economic growth, led by tourism or any other sector, and environmental protection of the Galapagos should be taken seriously when designing and implementing economic development and conservation programs

Ecotourism and Economic Growth in the Galapagos: An Island Economy-wide Analysis

This paper raises questions about the compatibility of "ecotourism" and conservation in the unique environment of the Galapagos Islands. It updates a 1999 economy-wide analysis that predicted that increases in tourism would result in rapid economic as well as demographic growth on the islands. The following six years witnessed sharp growth in tourism; a restructuring of tourism around larger cruise ships and new, larger hotels; and rapid population growth. Our findings indicate that total income (that is, the gross domestic product) of the Galapagos increased by an estimated 78% between 1999 and 2005, placing Galapagos among the fastest growing economies in the world. Tourism continues to be far and away the major driver of economic growth; however, new injections of all sorts of spending, including by government, commercial fishing, and conservation agencies, have had a multiplier effect on income in the Galapagos economy, and as a result, on population growth, via uncontrolled immigration that is theoretically prohibited by the Special Law of the Galapagos to prevent ecological harm to the islands. Further, immigration has diminished the effect of economic growth on household income, creating political pressure to find even more economic development options for Galapagos residents, including commercial fishing. The linkage between economic growth, led by tourism or any other sector, and environmental protection of the Galapagos should be taken seriously when designing and implementing economic development and conservation programs

Ecotourism and economic growth in the Galapagos: an island economy-wide analysis

This study revisits and updates a 1999 economy-wide analysis predicting that increases in tourism would result in rapid economic as well as demographic growth on the Galapagos Islands. The following six years witnessed sharp growth in tourism; a restructuring of tourism around larger cruise ships and new, larger hotels; and rapid population growth. Our findings indicate that total income (that is, the gross domestic product) of the Galapagos increased by an estimated 78 per cent between 1999 and 2005, making the Galapagos economy among the fastest growing in the world. Tourism continued to be far and away the major driver of economic growth. Nevertheless, population growth via new migration to the islands nearly erased the effect of economic growth on per-capita household income. These findings raise questions about the compatibility of ecotourism and conservation in this unique ecological setting.